The author | Wen Ruoshan
Edited | Jasin
For the new car-making force "Wei Xiaoli", 2021 is a year in which opportunities and risks increase at the same time.
This year, they sold more cars, delivering 91,429 units, 98,155 units, and 90,491 units, respectively.
All three sets of data are close to the target of 100,000 vehicles per year. This is often considered by the industry to be a sign that the business is on the right track, and He Xiaopeng said in 2019 that "selling 100,000 cars a year is the premise of all future possibilities."
This allows them to temporarily sit in the first echelon of new energy vehicles, and even begin to lay out globalization. Both WEILai and Xiaopeng chose Norway as their first stop, and although the ideal progress is slow, the team for overseas markets has been established before May at the latest.
They also face new challenges.
For example, traditional car companies are accelerating their transformation, mid-waist car manufacturing forces are catching up, and Internet technology giants have also entered the market; they must also continue to deal with the adverse effects from the supply chain.
In the face of these new challenges, Wei Xiaoli now faces a new proposition: how to win again.
01 Competitive upgrade
In 2021, the new energy vehicle market ushered in a round of outbreak.
According to the data released by the Association of Automobile Manufacturers, from January to November 2021, China's new energy vehicle sales totaled 2.516 million units, compared with 903,000 units in the same period last year, up 178.63% year-on-year;
During the same period, in terms of sales share, NEV's shipments increased from 8.1% in January to 19.9% in November;
Correspondingly, the penetration rate of new energy vehicles in China in 2020 is 5.4%, and by January to March 2021, this figure will increase to 7.49%. In the next five years, the official forecast of the State Council office will increase at a compound annual growth rate of 34.2% for new energy vehicles, and the penetration rate will reach 20% by 2025.
On this basis, it is not difficult to find that the total sales volume of "Wei Xiaoli" of 280075 million yuan accounts for less than 10% of the market in China's new energy vehicle market.
From the perspective of sales alone, they want to further expand their market share, the difficulty will be greater than ever, the most direct reason is that the competition situation in the new energy vehicle market will be more severe.
First, traditional car companies continue to accelerate their transformation.
In the retail sales of new energy passenger cars, traditional car companies have occupied a considerable market share. From January to November this year, in the Top 15 retail sales of new energy passenger cars in the Chinese market, in addition to Tesla China, Xiaopeng Motors, Weilai Automobile, and Ideal Automobile, the remaining 14 seats are traditional car companies, of which BYD and SAIC-GM-Wuling together occupy 34.5% of the market share.
From the perspective of the overall auto market, after experiencing the initial stage of transformation, the next steps of traditional car companies will only be faster.
On the other hand, many of them intend to split the relevant businesses and list them separately, at present, a number of car companies, including SAIC, BYD, Geely Automobile, and Great Wall Motors, have all moved to split and list their new energy vehicle-related sectors separately.
In this regard, some private equity people have told the media that the market uses two completely different valuation standards for fuel vehicles and new energy vehicles - fuel vehicles look at profits, according to PE to the valuation; new energy vehicles look at sales, dare to burn money instead of higher valuation.
In other words, independent listings are a more effective means of financing and can help them scale up quickly.
Second, the new forces of the second echelon are also accelerating their catch-up.
In the middle of last year, WM's Shen Hui said that he was "very confident in becoming a head enterprise", Nezha Automobile repeatedly shouted the slogan of "ranking in the first camp" in the propaganda caliber, and almost at the same time, Zhu Jiangming, the founder of Zero-run Automobile, expressed his position at the 2.0 strategy conference, saying that in 2025, it would achieve an annual sales volume of 800,000 units and surpass Tesla in the field of intelligence in three years.
Taking the three of them as an example, from the most intuitive delivery volume, the annual sales of WM, Nezha and Zero Run Cars in 2021 will be 44157 units, 69674 units and 43121 units, respectively, compared with "Wei Xiaoli".
But from another perspective, WM's deliveries last year were close to the sum of its deliveries in the past three years, and in the sales ranking of the new forces in October, Nezha squeezed second with sales of 8107 vehicles, and Weima also squeezed fourth with sales of 5025 vehicles.
Wei Xiaoli could not completely ignore their existence.
Third, there are more and more Internet technology giants building cross-border cars, and they will also become direct competitors of "Wei Xiaoli".
In the article "Delivery War: The Key Battle of New Energy Vehicles", we proposed that for newly entered Internet technology companies such as Xiaomi, they are not short of money, and it is easy to make up for the technical link, they are also good at designing products from the user's point of view, and they also understand Internet marketing.
Their biggest disadvantage now is time and experience. But their opportunities are also in the time window is still there, the industry generally believes that the new energy vehicle market penetration rate of 20% of the time node will be 2025, when Wei Xiaoli will really usher in a round of big test.
02 Cyclical challenges
According to the current development trend, the new energy automobile industry will continue to maintain high growth rate in the future. In the prediction of many securities companies, china's new energy vehicle sales will reach the level of 5 million in 2022.
Data released by the China Association of Automobile Manufacturers shows that from January to November this year, the penetration rate of China's new energy vehicle market was 12.7%, and from the beginning of the year to the end of the year, this number showed a continuous upward trend. In October, the market penetration rate of new energy vehicles reached 16.4%, and the market penetration rate of new energy passenger vehicles reached 18.2%.
We see that based on the judgment of the industry's high prosperity and high growth, players in the industry have given a more aggressive sales plan.
For example, the ideal of the first echelon will target 1.6 million vehicles in 2025; the zero run of the second echelon will set the sales target for 800,000 units in 2025;
Geely, which is in the traditional car-making camp, is more aggressive, saying that in 2020, the sales of new energy vehicles will account for 90% of the overall sales, but this goal has not been achieved; even Xiaomi, which has just entered the game for a year, has news that its goal is to sell 900,000 cars from 2024 to 2027.
This is bound to bring about the concentration of the entire industry on the capacity side, which is not a bad thing, but with reference to past historical experience, the new energy automobile industry is likely to usher in a short-term cyclical adjustment.
Referring to the smartphone industry, from 2009 to 2013, the penetration rate accelerated, and the excess income of the electronics industry increased significantly for 2 years from 2009 to 2010, and then there was a sharp drawdown in 2011. It was also in that year that the penetration rate of smartphones in our country increased from 15% to 20%.
The reason is that in the initial stage of the penetration rate began to accelerate, the capacity reserve will be insufficient in the short term, resulting in a revenue growth rate much greater than the capacity growth rate, but in the following 2 years, most companies will quickly adjust the production capacity construction for the future penetration rate. The phased concentration of production capacity has led to a decline in the gross profit margin of the industry, which in turn has led to a phased break in excess revenue.
After experiencing ultra-high-speed growth in the past two years, the new energy automobile industry may also face a recuperation similar to the annual level of the electronics industry in 2011.
For example, the relevant stocks in the new energy vehicle industry chain that have benefited significantly in the past one or two years are likely to continue to maintain the growth rate in 2021.
In this case, car companies need to consider more than just expanding production capacity.
As early as the end of 2020, Bai Yiyang, an analyst at CMB International Securities, told the media that car companies can appropriately plan their production capacity in advance, but they should be fully aware of the cyclical characteristics of the automotive industry and avoid being dragged down by excess capacity at the bottom of the cycle.
He said that overcapacity will lead to a decline in the overall profitability of the industry, intensified competition on the sales side, and a low utilization rate of capacity on the supply side, which will lead to the inability to increase the operating leverage of enterprises.
Of course, for now, the high prosperity of the new energy vehicle market is still continuing, and the penetration rate continues to increase has become an irreversible trend.
But for all players in the industry, what will really affect them is whether their optimistic estimates of the speed of market penetration match the actual rate of digestion of the market.
For the "Wei Xiaoli", who is already in the first echelon, after they basically achieve the phased goal of selling 100,000 vehicles a year, the next goal is to pursue a higher scale effect, and how to make a stable transition in this round of industry cycle is also a test for them.
03 Supply chain weakness
In 2021, the biggest black swan in the automotive industry is the lack of cores.
Since the end of 2020, the global chip supply has continued to be tight, with the average lead time extending from 13 weeks in November 2020 to 22.3 weeks in November last year.
According to AFS's calculations, as of December 12, 2021, the global production was reduced by 10.23 million units due to lack of cores, of which China reduced production by 1.982 million units, accounting for about 19.4%.
Under the subdivision, new energy vehicles in this wave of lack of core tide to achieve contrarian growth, we have mentioned above, from January to November last year, China's new energy vehicle sales rose by 178.63% year-on-year.
Huafu Securities analyzed in a research report that there are three reasons for the growth of new energy vehicles against the trend: one is that independent brands have demonstrated good supply chain management capabilities; second, the penetration rate of independent new energy vehicles is higher; and the third is the improvement of independent product strength.
In contrast, at present, "Wei Xiaoli" is not always comfortable in dealing with the lack of core.
For example, the Weilai Jianghuai plant was forced to stop production for five consecutive days, and it is estimated that it will cut production by 600 vehicles. Since August, NIO's monthly sales have begun to decline, and in the lowest October, its sales volume was only 3667 units.
There are even Weilai car owners waiting to pick up the car complaining to the media, "Weilai's supply chain capabilities are far worse than I thought."
Also burdened by the lack of cores are ideal and Xiaopeng, etc., in order to ensure the delivery volume, they have launched a variety of reduction delivery programs: if consumers want to mention the Xiaopeng P5 and ideal ONE models as soon as possible, they can choose the delivery plan of the reduced radar, and then reload after the radar supply is sufficient.
Why is their lack of core more serious? The reason is twofold:
First, compared with the whole vehicle, the bargaining power in the upstream of the industrial chain is higher.
In the new energy vehicle industry chain, the technical threshold of some parts is high, resulting in insufficient supply, and the production capacity of OEMs is limited to the upstream supply side.
Second, compared with traditional OEMs with larger shipments, Wei Xiaoli is smaller, resulting in insufficient bargaining power and ability to take goods.
The supply of chips in the whole industry began to improve at the end of September last year, but the impact of the lack of cores on the upstream of the industrial chain is far-reaching, that is, the supply chain party A tends to strictly control the parts flowing to the circulation field, and they are more willing to supply to traditional OEMs with more stable demand.
The year-long lack of cores in the industry has actually given new energy vehicle companies a wake-up call: they need to improve supply chain security.
This will also be a key factor in the future industry scramble.
For example, in November 2020, Ideal Automobile was taken the lead by a traditional large factory in a chip battle, and the other party swept away all the remaining stock, almost causing its Changzhou factory to stop.
This directly illustrates a point: in the ecology of the new energy automobile industry, the new forces of car-making use Internet thinking to build cars, they know more about users, are well versed in Internet play, and have stronger ability to innovate models, but the traditional car companies' mature supplier supporting systems and the industrial chain integration capabilities of Internet technology companies are the advantages they lack.
If they can't make up for this shortcoming in a short period of time, they are likely to fall into a more passive situation in the future - as the competition between automakers in tracks such as autonomous driving and smart cockpits becomes more and more fierce, the "arms race" of automobile intelligence has begun.
This means that the intelligent supply chain is expected to usher in a historic opportunity for volume and price to rise together, but for Wei Xiaoli, this is not their opportunity, the core also depends on the pressure capacity of the supply chain.